SKIET (SK IE Technology Co.), a battery materials subsidiary of South Korean power battery company SK Innovation Co., will be listed on the Seoul Stock Exchange on May 11, with an issue price of 10,5000 won (approximately US$94) today. The previously announced issuance price range (7,8000-10,5000 won) upper limit, the company's market value reached 6.74 billion US dollars. SKIET is expected to issue a total of 21.39 million ordinary shares, including 855,6,000 new shares, and raise funds of more than 2.2 trillion won (approximately US$1.98 billion). It is expected to become the largest IPO in South Korea in four years.
The global market share of wet process diaphragm exceeds 25%. SKIET still seeks to expand production
SKIET mainly produces lithium battery separators, and its customers include Tesla, Volkswagen, LG, etc. According to data from SNE Research, the market share of SKIET wet process membranes reached 26.5% last year.
It is understood that because the diaphragm can effectively improve the performance and stability of the battery, the diaphragm can be regarded as one of the most important parts of the electric vehicle battery, accounting for about 15%-20% of the battery manufacturing cost.
Last week, SK Innovation, the parent company of SKIET, predicted that the global demand for wet separators for lithium batteries will increase from about 4 billion square meters in 2020 to about 16 billion square meters in 2025, and there will be a supply shortage from 2023.
In addition, SKIET issued an announcement showing that the company's diaphragm sales in 2020 will increase by 490% compared with 2018. It is expected that in the next three years, its diaphragm sales share will increase from the current 55% to 80%.
At a press conference held on April 22, SKIET CEO Lu Zaixi also stated that due to the continued bullish demand, in order to avoid insufficient supply, the company's production line requires an investment of 630 million to 720 million US dollars per year, and the existing capital flow cannot be supported. The funds from the IPO will be used mainly for production expansion. According to industry analysis, SKIET will need approximately US$1.35 billion in funding in the next two years.
Since the beginning of this year, SKIET has made great strides in the expansion of diaphragm production capacity.
On the one hand, the company said it is optimistic about the prospects of China's electric vehicle market, and will quickly increase the Chinese market by using China as its first overseas production base.
On April 13, SKIET announced that China's Changzhou Diaphragm No. 2 Plant officially started commercial operations, which was less than half a year after the Changzhou No. 1 plant started commercial operation in November last year. After the two factories are fully put into production, SKIET's production capacity in China will reach 680 million square meters, which is equivalent to the annual production of 667,000 electric vehicles.
In addition, SKIET will also set its sights on Europe. In March, the company announced that it would invest more than US$980 million to build No. 3 and No. 4 battery separator plants in Poland. The two plants will start construction in Q3 this year and will be put into operation at the end of 2023. In addition to the No. 1 and No. 2 plants currently under construction, SKIET's total diaphragm production capacity in Poland will reach 1.54 billion square meters.
It is estimated that by 2024, SKIET's global production capacity will expand to 2.73 billion square meters.
However, industry analysts believe that, as a whole, SKIET's annual compound growth rate is lower than the industry average. Its lithium battery diaphragms are mainly supported by its own or subordinate joint venture factories, and the real external sales scale may be relatively limited.